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MercadoLibre Faces ‘Abusive Conduct’ Complaint From Argentine Lenders

MercadoLibre

Banks in Argentina are reportedly accusing eCommerce giant MercadoLibre’s payments platform of anti-competitive practices.

MODO, a digital wallet backed by dozens of Argentine lenders, claims that the company forces shoppers to fulfill online purchases using its payment platform, Mercado Pago, Bloomberg News reported Monday (May 6), citing a complaint filed to Argentina’s National Commission for the Defense of Competition.

“MercadoLibre’s abusive conduct, detailed in the complaint, creates negative effects for the market, disproportionately maximizing its earnings,” MODO wrote in the complaint, adding that it’s confident authorities will investigate “one or more anti-competitive practices,” forcing an “in-depth analysis of the payments and digital wallet ecosystem.”

MODO says that 80% of eCommerce retail sales in Argentina are carried out through Mercado Pago. While MODO praised the platform’s technology and recognized its dominant performance, it accused MercadoLibre of distorting the competition, the report said.

PYMNTS has contacted MercadoLibre for comment but has not yet gotten a reply. The Bloomberg report includes a statement from the company rejecting MODO’s accusations and calling them “absurd.”

“Perhaps banks should compete with each other, innovate, develop products and pay off balances, as banks do in the rest of Latin America, instead of colluding and blaming Mercado Pago without merit,” MercadoLibre said, adding that it complies with relevant regulations.

Founded in 1999, Mercado Libre operates 18 markets across Latin America, offering services such as eCommerce, payments, credit and personalized media.

The company last week announced a 71% increase in net profits across its divisions, with its business in Mexico and Brazil both emerging as major drivers of its quarterly success, each showing a 30% year-over-year increase in gross merchandise volume.

As covered here recently, Mercado Libre has upped its investment in Mexico, committing a record $2.5 billion for 2024, up from $1.6 billion the company invested in 2023. The company plans to use those funds to expand its warehouse facilities, enhance its logistics network, and increase the availability of loans.

“The importance of the Mexican market to Mercado Libre’s overall business strategy was underscored in its earnings announcement,” PYMNTS wrote last week. “Mexico accounted for over 20% of the company’s total revenue in 2023, up from just 12% in 2019.”